Sec. 297 of the cos act, 1956

poonam verma (Company Secretary) (191 Points)

17 July 2013  

Hi frens

I have a query regarding Sec. 297 of the Cos Act.

My Co. (public ltd.) wants to enter into a contract for purchase of some products from our another Group Company(Pvt. Ltd.) in which our MD is a Director. Paid up Cap. of my Co. is more than Rs. 5 Cr. so if we look at the sec. than we need to take prior approval of CG and pass the BR.

But if we make this transaction for cash/cheque at the market price of the product at which our Group Co. is selling the products to other Customers, than also do we need to take the approval of CG by filing F-24A ?or we can take advantage of  exception to Sec. i.e. sec.297(2)(a).

Pls clarify whether CG approval is required or not. If not required what requirements should be complied with.

Thanks in advace